New York Regulators Secure Electronic Records with Cloud-Based Communications

Strategic Insights -

New York financial regulators have reached agreements with Goldman Sachs, Deutsche Bank, Credit Suisse, and Bank of New York Mellon to retain electronic records with a cloud-based communications service for seven years. The agreements aim to ensure the banks' responsible use of Symphony Communications' chat and messaging platform, which includes a "guaranteed data deletion" feature. The service also provides end-to-end encryption, with only the sending and receiving institutions able to decipher messages using a private decryption key. As part of the agreements, the banks must store a copy of the decryption keys with independent custodians.

Key Takeaways:

  • The New York Department of Financial Services (DFS) has reached agreements with four major banks to retain electronic records with Symphony Communications' cloud-based chat and messaging platform for seven years.
  • The agreements aim to prevent the "digital black hole" of chat and electronic records from hindering investigations into wrongdoing on Wall Street.
  • Symphony Communications' platform includes a "guaranteed data deletion" feature and provides end-to-end encryption, using private decryption keys.
  • The banks must store a copy of the decryption keys with independent custodians, as stated in the agreements.
  • The DFS is concerned that the platform could impede its ability to investigate misconduct, but believes the requirements will be applied to all regulated financial institutions in the future.
  • The agreements are a positive development for Symphony Communications, which claims to provide state-of-the-art cybersecurity and strengthen compliance operations.
  • Anthony Albanese, DFS superintendent, emphasized the importance of regulators acting to ensure the preservation of electronic records, which have been crucial in investigations of wrongdoing.

Statistics:

  • 7 years: The duration for which the banks must retain electronic records with Symphony Communications' cloud-based chat and messaging platform.
  • 14: The number of financial institutions in the consortium that created the Symphony platform.
  • 4: Number of banks that have signed agreements with the DFS (Goldman Sachs, Deutsche Bank, Credit Suisse, and Bank of New York Mellon).
  • 100%: The percentage of decryption keys that must be stored with independent custodians, as per the agreements.
  • Ongoing: The launch of Symphony Communications' platform, which aims to provide state-of-the-art cybersecurity and strengthen compliance operations.

Sources:

  • "New York regulators reach agreements with banks on messaging platform" by Anthony Brino, Albany Bureau chief (Albany Times Union) *https://www.timesunion.com/business/article/New-York-regulators-reach-agreements-with-banks-15944512.php*
  • Department of Financial Services, *NY Regulator*